An Introduction to the Use of Blocker Corporations in M&A Transactions

Summary

This article discusses the use of so-called "blocker corporations." In an earlier article titled "Rollover Equity Transactions 2021," we discussed the various business and tax issues associated with transactions involving private equity (PE) buyers who include rollovers of target owner equity in their leveraged buyout (LBO) transactions. Here, we take a deeper dive into the ramifications of having some PE investors invest in target companies through blocker corporations.